Yesterday (10), the lead story of our newspaper ran the headline, “Electricity Tariff Up by 75% From Today.”
But even before this hike, Sri Lanka has been facing its worst socioeconomic crisis since obtaining independence 74 years ago. A brief analysis showed that this electricity hike will not only hurt the poor even more, but Sri Lanka’s struggling “businesses” as well.
Data showed that with this tariff increase, Sri Lanka’s “Business” electricity rates will now be on par with that of the USA, the world’s largest economy, thereby challenging its competitiveness in the global market place, given that the USA is Sri Lanka’s biggest merchandise export market.
Global electricity tariff data is based on December 2021 figures given by GlobalPetrolPrices.com., which is the latest of such statistics available on their website.
Further, when considering Sri Lanka’s current electricity tariffs vis-à-vis eight of its regional competitors, namely India, Singapore, Vietnam, China, Thailand, Pakistan, Bangladesh and Malaysia, where, however, as far as the latter countries are concerned, it’s also based on December 2021 tariff rates, Domestic tariffs less than that of Sri Lanka’s was found in three countries, Pakistan, Bangladesh and Malaysia, while Domestic tariffs in Vietnam, China. India, Singapore and Thailand were found to be more than that of Sri Lanka’s.
Meanwhile, in five countries, India, Bangladesh, China, Vietnam and Malaysia, their Business tariffs were less than that of Sri Lanka’s; in Thailand, their Business tariff was equal to that of Sri Lanka’s, while only Singapore and Pakistan “now” have higher Business tariff than that of Sri Lanka’s among the above eight economies.
However, vis-à-vis Sri Lanka’s new, Domestic electricity tariff; that will be less by 30 per cent over that of USA’s Domestic tariff. But is the US consumer richer by only 30 per cent than that of his counterpart in Sri Lanka?
According to statista.com, USA’s per capita GDP last year was US$ 69,234.40; compared to Sri Lanka’s miserly $ 3,815 according to Central Bank of Sri Lanka (CBSL), which shows that the USA’s per capita GDP is not 30 per cent, but 1,715 per cent more than that of Sri Lanka’s!
Vis-à-vis Sri Lanka’s neighbours, in respect of India, Sri Lanka’s Domestic tariff was less by 12.5 per cent, but vis-à-vis “Business,” it was more by 10 per cent. Vis-à-vis Pakistan it was more by 75 per cent in respect of “Domestic,” but 21.43 per cent less vis-à-vis “Business.” Bangladesh, Sri Lanka was16.67 per cent more vis-à-vis Domestic tariff and 10 per cent more than Bangladesh’s Business tariff.
Singapore’s Domestic and Business tariffs were more by 42.1 and 31.25 per cent, each, vis-à-vis Sri Lanka’s. Malaysia’s Domestic and Business tariffs were less by 40 and 22.22 per cent respectively than that of Sri Lanka’s.
In Vietnam, Domestic tariff was more by 12.5 per cent, but Business tariff was less by 37.5 per cent than that of Sri Lanka’s. In China, Domestic tariff was more by 12.5 per cent, but Business tariff was less by 22.22 per cent than that of Sri Lanka’s. Vis-à-vis Thailand’s, Sri Lanka’s Domestic tariffs were less by 36.37 per cent, but its Business tariff was equivalent to that of Sri Lanka’s.
According to CBSL’s 2021 Annual Report, the average domestic tariff unit or the sale price of one kilo Watt hour unit of electricity was Rs 14.91 last year. That means that this rate would be increased to Rs 26.09 or US$ 0.07 per unit, effective from yesterday. Conversions are based on the middle rate of the US dollar as at yesterday, which, according to CBSL was Rs 360.94 per dollar.
According to CBSL, the per unit “General Purpose Electricity Tariff Rate” (GPETR) last year was Rs 23.42. Public Utilities Commission of Sri Lanka (PUCSL) the electricity regulator, defines GPETR as “supply of electricity to be used in shops, offices, banks, warehouses, public buildings, hospitals, educational establishments, places of entertainment and other premises not covered under any other tariffs.”
Therefore, for convenience, GPETR may be defined as “Business Tariff” which will have had been increased to Rs 40.99 ($ 0.11) per unit from yesterday (10).